Zelira Therapeutics Ltd (ASX:ZLD, OTCQB:ZLDAF) has received US$250,000 of its upfront non-refundable, non-contingent licensing fee of US$1 million from DRCN Holdings LLC, with the remaining US$750,000 expected to be received in the first quarter of 2022.
The global leader in the research and development of clinically validated cannabinoid medicines had successfully demonstrated enhanced dissolution of cannabinoids using its enhanced distillate capture and dissolution matrix (EDCDM) and signed a foundation licensing deal for this proprietary technology.
Accelerate prescription & OTC businesses
Zelira Therapeutics global managing director and CEO Oludare Odumosu said: “Zelira is delighted to be partnering with DRCN Holdings to commercialise our proprietary EDCDM technology.
“The licensing arrangement with DRCN is evidence of the value partners place on Zelira’s technology to solve issues impacting the wider acceptance and usage of cannabinoid-based medicines – the difficulty in formulating solid oral dosage drugs with distillate, and the low rate of dissolution into the body from capsules and tablets.
“Partial receipt of the upfront, non-refundable, non-contingent fee strengthens Zelira’s cash position allowing us to continue to accelerate our prescription (Rx) and Over-The-Counter (OTC) businesses and commercialisation strategies.
“We look forward to receiving the balance of the upfront, non-refundable, non-contingent fee this quarter.
“We look forward to partnering with DRCN Holdings to bring new products to market that enhance people's lives.”
DRCN licensing deal
The key terms of the licensing agreement with DRCN include:
➢ Zelira to receive an upfront, non-refundable, non-contingent licensing fee of US$1 million from DRCN Holdings (partially received), with the remaining US$750,000 expected to be received in the first quarter of 2022;
➢ DRCN Holdings has an option to designate up to three product target profiles for which Zelira can develop products;
➢ DRCN has a three-year period to exercise product development options, with a possible two-year extension;
➢ Products must generate a minimum of US$1 million in net sales each year after commercialisation, otherwise either party has the right to cancel the license; and
➢ Zelira to receive a 20% royalty on net sales from commercialised products created under the license.
Class A performance rights milestones
The milestones for Zelira’s 393,870,322 Class A performance rights have now been met.
The milestone for performance rights conversion was cumulative revenues from the date of issue of the performance rights received by the company or its subsidiaries from US-based product sales of products derived or generated from Ilera Therapeutics LLC exceeding US$1 million within five years from the date of issue of the performance rights.
These performance rights will be converted into fully paid ordinary shares in accordance with the terms and conditions associated with the Class A performance rights.